Profit at DreamWorks Animation surged in the fourth quarter of 2015, thanks to a strong contribution from its television business.
The Glendale-based studio, known for such family-friendly movies as “Shrek” and “King Fu Panda,” on Tuesday reported that it earned $42.1 million, or 48 cents a share, in the three months ended Dec. 31, compared with a loss of $54.8 million, or 64 cents a share, during the same period a year ago.
Revenue in the quarter rose to $319 million, up 36% from the same period in 2014 -- its best revenue in nearly a decade. The studio easily beat Wall Street expectations, which called for just 16 cents per share in the fourth quarter on revenue of $274 million.
The impressive performance by the company came amid what DreamWorks CEO Jeffrey Katzenberg called a “transitional year.” The company overhauled its film operations after a string of box-office failures and reduced its film output to only two films a year beginning in 2016, down from three. The company also closed its Redwood City, Calif., animation studio and slashed 500 jobs.
“While I am proud of our efforts to date, there are still challenges left,” Katzenberg said in a call with investors.
DreamWorks has increasingly been reducing its reliance on the unpredictable feature film business to generate other revenue sources. It has been steadily growing its television unit by licensing original content to media houses and video streaming companies. The investment seems to be paying off.
The lion's share of its good fortune in the fourth quarter came from its television offerings, which more than doubled from the year prior to $104.9 million.
Late last year it struck a deal with Canada-based entertainment company DHX Media to co-produce 130 episodes of original animated children’s content at DHX Studios. DreamWorks Animation also recently expanded its deal with Netflix to develop more shows based on its movies and other characters, including a reboot of 1980s cartoon “Voltron.” The deal also includes streaming rights to DreamWorks’s feature films.
Revenue from its feature film business, meanwhile, increased 11.5 % to $146.4 million, boosted by the worldwide pay-TV release of “Home” and “The Penguins of Madagascar.”
Katzenberg said the company entered 2016 with “considerable momentum,” and added that “the best years for DreamWorks remain ahead of us.”
“Kung Fu Panda 3” wasn't released in time to affect the fourth quarter but has been a solid performer since its release last month. It has taken in nearly $300 million worldwide, with its release in the U.S., China and a handful of other countries. And in November it will release “Troll,” which features voice performances by Anna Kendrick, Justin Timberlake and James Corden.
Shares of the company rose nearly 10% to $23.15 in after-hours trading Tuesday.
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